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Non-Tech : Enhancing Profits Through Incorporating
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To: hpeace who wrote (14)3/16/1997 10:55:00 PM
From: SE   of 88
 
Steve

I have never looked into it because I don't have any clients who could be considered "traders" but it seems to me that getting around the 2% rule may be a mistake. By this I mean that it would seem that if you wanted to treat this as a business you would first need it as your sole source of income, or at the very least your substantial source of income. If this is the case, the gains and losses would probably be reported on a Schedule C, Profit or Loss from Business and then you would be able to deduct all of your expense against the income. The downside is that the net income is now subject to ordinary income tax rates (as high as 39.6%) instead of the cap gains rate of 28% and self employment tax rates (15.3%, with a cap on the social security piece, but none on the 2.9% medicare piece). There seldom is a free lunch. Of course, everyone's individual circumstances will dictate differently.

Scott
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